Apparently (K)Ubuntu Gutsy loads XGL by default – if you have it installed it boots it whether you tell it to or not – which means you won’t have direct rendering. Remove XGL, and suddenly direct rendering works. If I’d known that I could have saved myself alot of headache.
Compiz is nice, but unfortunately AIGLX does not seem to run very system-efficiently with this first AIGLX-enabled driver. Hopefully successive drivers will improve it so it doesn’t bog down the system so bad.